Ceasefire called in Gaza after two days of violence

After two days of exchanges, a ceasefire had been agreed between Israel and Islamic Jihad militants in the Gaza Strip. It's the largest outbreak of violence for almost two years.

Transcript

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PETER LLOYD: After two days of exchanges, a ceasefire has been agreed between Israel and Islamic Jihad militants in the Gaza Strip. It's the largest outbreak of violence for almost two years.

Middle East correspondent Hayden Cooper reports.

(Islamic jihad fighter speaking Hebrew)

HAYDEN COOPER: Dressed in black and reading from a script, an Islamic jihad fighter delivers his message using broken Hebrew.

"To the cowardly Zionist army, we of the al-Quds Brigade are prepared," he declares. "Israeli soldiers will have no choice, they will die..."

The angry video surfaced as more rockets were fired across the border into southern Israel. That's more than 70 launched in two days.

And in turn, Israeli airstrikes resumed; more than 30 Gaza targets were bombed as the two sides exchanged threats.

(Benjamin Netanyahu speaking Hebrew)

"Our policy in the south is clear," says the Israeli prime minister Benjamin Netanyahu. "We are foiling and harming those who try to harm us and we will respond with fierce intensity for each attack."

In Bethlehem, standing alongside the British prime minister David Cameron, Mahmood Abbas, the Palestinian Authority president, struck a conciliatory tone - albeit with a reminder that Israel's actions prompted the rocket attack.

(Mahmood Abbas speaking Arabic)

"Israeli occupation forces recently killed in cold blood three Palestinians in the West Bank and three more in Gaza," he said. "We did not hear any condemnation for such acts from the Israeli government. Yesterday there was rocket fire from Gaza and Israel retaliated. We condemn the offensive and the escalation of military acts in all its forms," he said, "including the rockets."

But Mahmood Abbas has little power in Gaza. Here, Hamas is in charge. "The Israeli occupation is fully responsible for the escalation taking place," said one Hamas leader, Sami Abi Zuhri.

As sirens were sounding again in southern Israeli towns, however, moves to end the conflict were afoot. Egypt had stepped in to act as a mediator between Islamic Jihad and Israel; the resulting ceasefire effectively ends the two day conflict - at least until the next rocket or airstrike.

It's an ominous sign for the ongoing US-brokered peace talks. The US secretary of state John Kerry says mistrust between Israelis and Palestinians is the highest he has ever seen.